THE ECONOMY IN ARMENIAArmenia used to be the richest republic of the USSR. That was then. This is now.Tour ArmeniaUpdated 2019

In short:

Since the collapse of the USSR in December 1991 and the ongoing conflict with Azerbaijan over Nagorno-Karabakh, Armenia has been in a severe economic decline with small percentages of growth in select sectors, mainly restricted to Yerevan. Under the old Soviet central planning system, Armenia had developed a significant industrial sector, supplying machine tools, textiles, and other manufactured goods to other republics in exchange for raw materials and energy.

Since 1991, Armenia has also switched to small-scale farming away from the behemoth agricultural complexes of the Soviet era. The agricultural sector has long-term needs for more investment and updated technology.

The privatization of industry has been at a slower pace, and seems rife with corruption. Strategic interests such as Armenia's phone sector and electric generation plants, have been sold to Greek and Russian interests, respectively. Armenia is a food importer, and its mineral deposits (copper, gold, bauxite) are small.

By 1994, however, the Armenian Government had launched an ambitious IMF-sponsored economic program that has resulted in positive growth rates in 1995-2003. Armenia also has managed to slash inflation, stabilize the local currency (the dram), and privatize most small- and medium-sized enterprises.

The service sector and small enterprises constitute the bulk of Armenia's growing economy.